AAA credit rating maintained despite deficits

Moody's Investors Service recently maintained Bloomfield Township's credit rating when it gave the municipality a "AAA negative" credit rating based on $164 million in unfunded liabilities being carried by the township. The negative connotation refers to the township's financial outlook, specifically unfunded liabilities that have created a structural deficit that elected officials are working to address. Still, the investment rating service maintained the city's coveted AAA rating, which is near the top of the rating system. "Bloomfield Township's strong credit features include a wealthy residential tax base and very strong operating fund balance and liquidity," Moody's wrote in issuing the rating, citing the township's "strong tax base," and the "capacity to increase revenue in an effort to address high and rising fixed costs." The "negative" rating sounds a cautionary note over the township's bonded debt and unfunded post-employment liabilities (OPEB), such as health care coverage for retirees. However, Moody's noted the township has "shown the willingness to tap into its base, with voter approval, to raise revenue and maintain its healthy financial balances." Bloomfield Township Treasurer Brian Kepes said the township is working to address their liabilities. "We are extremely pleased with Moody's reaffirmation of Bloomfield Township's credit rating," Kepes said. "However, Moody's has also reaffirmed its negative outlook, based on the OPEB (Other Post Employment Benefits) and defined benefit liabilities." The township recently contracted with Plante Moran to create a long-term funding plan to address pension and retiree healthcare liabilities. Township Supervisor Leo Savoie said he believes that plan helped the township to maintain its AAA rating. "I was surprised they kept the triple-A rating with the OPEB and defined benefit issue hanging over us," he said. "I don't think they would have had we not had this plan in place. ... There are no other AAA communities out there with that kind of obligation." Savoie said overall, the township remains extremely solid financially and is working to address concerns raised by Moody's. Bloomfield Township has routinely received AAA credit ratings from Moody's and Standard and Poor's Rating Services for the past several years.